What is the present value-discount rate

Assignment Help Financial Management
Reference no: EM131020545

a. What is the present value (PV) of $359,000 that is to be received at the end of 23 years if the discount rate is 11 percent? b. How would your answer change in Part (a) if the $359,000 is to be received at the end of 20 years?

Reference no: EM131020545

Questions Cloud

What is the cost of capital to the firm for preferred stock : Your firm is planning to issue preferred stock. The stock is expected to sell for $97.39 a share and will have a $100 par value on which the firm will pay a 14.7% divident. What is the cost of capital to the firm for the preferred stock?
What is the current price of the common stock : McGaha Enterprises expects earnings and dividends to grow at a rate of 25% for the next 4 years, after the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market ..
Should the investor acquire the stock : Company XYZ's preferred stock is selling for $26 in the market and pays a $2.60 annual divident. If the market's required yield is 11%, what is the value of the stock for that investor? Should the investor acquire the stock?
Evaluate arts decision-making skills : Read the case study titled "Meet Art" on page 147 in our textbook. How would you evaluate Art's decision-making skills? What would you have done differently? In this case study, how would you evaluate Joan's response to Art's request to move to Calif..
What is the present value-discount rate : What is the present value (PV) of $359,000 that is to be received at the end of 23 years if the discount rate is 11 percent? How would your answer change in Part (a) if the $359,000 is to be received at the end of 20 years?
Write an equation for the domestic demand curve : Given the above figure, write an equation for the domestic demand curve, Ddom. Given the above figure, write an equation for the domestic supply curve, Sdom. Show youar work
What must be true about the price elasticity of demand : According to the author of the article: "For this publisher, that means less revenue and less profit as some buyers reject the more expensive books." Does the fact that some buyers will no longer buy the publisher's books at a higher price necess..
What is the equipments after-tax salvage value : Southern California Gas Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $27,500, of which 75% has been depreciated. The firm can sell the used equipment today f..
What is the limit of c as n increases without bound : Find the value of c when n = 5, n = 6. Graph c as a function of n. What is the limit of c as n increases without bound?

Reviews

Write a Review

Financial Management Questions & Answers

  An ordinary annuity has an interest rate

An ordinary annuity has an interest rate of 10% and a future value of 80.00. What would be the future value of this same annuity, if it were an annuity due instead of a regular annuity? The future value of this annuity due is $

  Expected interest rate

The real risk-free rate is 2.8%. Inflation is expected to be 2.85% this year, 4.75% next year, and then 3.3% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year T..

  Calculate the project’s initial time 0 cash flow

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant over..

  What is the risk-neutral probability that the stock price

A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 12% or down by 6%. The risk-free interest rate is 5%. What is the risk-neutral probability that the stock price will increase each period? (Report..

  Free cash flow-growth or investment projects

An oil drilling company has some free cash flow that is not expected to be used for growth or investment projects. Which method of cash distribution carries more informational content when an announcement is made? Some researchers and analysts have n..

  After-tax cost of preferred stock

Calculate the after-tax cost of preferred stock for Bozeman-Western Airlines Inc. which is planning to sell $10 million of $6.50 cumulative preferred stock to the public at a price of $50 a share. Issuance costs are estimated to be $2 a share. The co..

  Depreciate against the dollar from its spot rate

You expect that the INR will depreciate against the dollar from its spot rate of $.0.15 to $.0.125 in 60 days. The following interbank lending and borrowing rates exist: How can you profit from the above given information. Estimate the profits that c..

  Allocated between the market portfolio and t-bills

An investor is trying to determine how much of his/her investment should be allocated between the market portfolio and t-bills. To achieve a beta of 0.9, how much should be invested in t-bills?

  What is the firm cost of equity

What is the value of the firm according to MM with corporate taxes? If the following is true: EBIT: $100,000 rd: 12% Tc: 30% Debt: $500,000 rsU: 16%. What is the firm's cost of equity? If the following is true:

  How many percent return-loss will your company

A project will cost $4,819,724 and its expected to earn zero after one year, but $3,009,913 at the end of the second year, and $2,779, 333 at the end of the third year. and they generally want a return of 15% per year. Corporate tax rate is at 37%. I..

  What is the net present value of this lockbox arrangement

You are considering implementing a lockbox system for your firm. The system is expected to reduce the average collection time by 2.8 days. On an average day, your firm receives 2,419 checks with an average value of $1,287 each. The daily interest rat..

  Discuss the following topic should investors care about a

discuss the following topic should investors care about a multinational firms accounting exposure?accounting exposure

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd